PAUL SANTIAGO VS. CF SHARP CREW MNGT. INC.. Rod

G.R. No. 162419 July 10, 2007 PAUL V. SANTIAGO, petitioner, vs.
CF SHARP CREW
MANAGEMENT, INC., respondent. D E C I S I O N TINGA, J.:
Jurisprudence:
Despite the absence of an employer-employee relationship between petitioner and respondent,
the Court rules that the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of
labor arbiters is not limited to claims arising from employer-employee relationships. Section 10
of R.A. No. 8042 (Migrant Workers Act)
Facts:
This is case is brought by Paul Santaigo (Petitioner) a seafarer working for about 5 years at
Smith Bell Management Inc. (Respondent).
On 3 February 1998, petitioner signed a new contract of employment with respondent, with the
duration of nine (9) months, overtime pay and other benefits.
On 4 February 1998, the contract was approved by the Philippine Overseas Employment
Administration (POEA). Petitioner was to be deployed on board the "MSV Seaspread" which
was scheduled to leave the port of Manila for Canada on 13 February 1998. However, A week
before the scheduled date of departure, Petitioner was told that he would not be leaving for
Canada anymore for the complaint lodged through a telephone call from his wife and other
callers who did not reveal their identity not to send him at MSV Seaspread informing that Paul
Santiago (petitioner) if allowed to depart will jump ship in Canada like what his brother
Christopher Santiago did. In this instance, Petitioner filed a complaint for illegal dismissal,
damages, and attorney's fees against respondent and its foreign principal, Cable and Wireless
(Marine) Ltd before the office of Labor Arbiter Teresita Castillon-Lora, who ruled that the
employment contract remained valid but had not commenced since petitioner was not deployed.
The labor arbiter held respondent liable. But on appeal by respondent at the National Labor
Relations Commission (NLRC) ruled that there is no employer-employee relationship between
petitioner and respondent because under the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract),
the employment contract shall commence upon actual departure of the seafarer from the airport
or seaport at the point of hire and with a POEA-approved contract. In the absence of an
employer-employee relationship between the parties, the claims for illegal dismissal, actual
damages, and attorney’s fees should be dismissed and the NLRC found respondent’s decision not
to deploy petitioner to be a valid exercise of its management prerogative. However, the NLRC
disposed of the appeal AFFIRMING in so far as other claims are concerned and with
MODIFICATION by VACATING the award of actual damages and attorney’s fees. Hence,
Petitioner moved for the reconsideration of the NLRC’s Decision but his motion was denied for
lack of merit. Thereat, he elevated the case the Court of Appeals for certiorari, the court of
Appeals noted that there is an ambiguity in the NLRC’s Decision when it affirmed with
modification the labor arbiter’s Decision, because there is nothing more left in the labor arbiter’s
Decision to affirm considering that petitioner is not entitled to actual damages because damages
are not recoverable by a worker who was not deployed by his agency within the period
prescribed in the POEA Rules and no employer-employee relationship between the parties arose
and any claim for damages against the so-called employer could have no leg to stand on.
Issue:
Whether or not the petitioner is entitled to claim actual damages even though he was not deploy
by his agency on board the “MSV Seaspread” and no employer-employee relationship exist
between the parties.
Ruling:
Yes. The petitioner is allowed to claim the actual or compensatory damages.
It is a well-settled rule that the seafarers are considered contractual employees under the Labor
Code. Their employment is governed by the contracts they sign every time they are rehired and
their employment is terminated when the contract expires.
Despite the absence of an employer-employee relationship between petitioner and respondent,
the Court rules that the NLRC has jurisdiction over petitioner’s complaint. The jurisdiction of
labor arbiters is not limited to claims arising from employer-employee relationships. Section 10
of R.A. No. 8042 (Migrant Workers Act)
The perfection of the contract, which in this case coincided with the date of execution thereof,
occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of
the terms and conditions therein. The commencement of the employer-employee relationship, as
earlier discussed, would have taken place had petitioner been actually deployed from the point of
hire. Thus, even before the start of any employer-employee relationship, contemporaneous with
the perfection of the employment contract was the birth of certain rights and obligations, the
breach of which may give rise to a cause of action against the erring party. Thus, if the reverse
had happened, that is the seafarer failed or refused to be deployed as agreed upon, he would be
liable for damages.

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G.R. No. 162419 July 10, 2007 PAUL V. SANTIAGO, petitioner, vs.

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